Wednesday, February 04, 2004

Capitalism & Law: Bush's Real Lie

While the popular debate centers on whether the White House lied about WMDs in Iraq, less attention has been paid to date over the president's most damaging lie—his decision to intentionally mislead the public on the cost of his "compassionate" Medicare bill. On Monday, the White House's budget revealed that the pact was cost several hundred billion more than the White House originally stated. This was not the product of bad intelligence, like Iraq, but rather a deliberate political decision to mislead the American people for political purposes. This lie alone constitutes grounds for kicking Bush out of office—especially when you consider the abusive tactics Republican congressional leaders employed to coerce members into voting for the Medicare package.

The federal government's gross debt — the accumulation of its annual deficits — was about $7 trillion last September, which works out to about $24,000 for every man, woman and child in this country. But that number excludes items like the gap between the government's Social Security and Medicare commitments and the money put aside to pay for them. If these items are factored in, the burden for every American rises to well over $100,000.

The new Medicare prescription drug benefit will add thousands more to that tab. This benefit is unquestionably popular and will make it easier for some older Americans to afford expensive prescription drugs. But it also comes with a steep price tag that few want to talk about. The truth is that the drug benefit as signed into law is one of the largest commitments ever undertaken by the federal government. Preliminary estimates of its long-term cost in current dollars range up to $8 trillion.

To put that number into perspective: it is about four times the entire federal budget. Long-term simulations from the legislative agency I head, the General Accounting Office, paint a chilling picture. Even before the new drug benefit was enacted, these simulations showed that by 2040 current policy could require a 50 percent reduction in federal spending or a doubling of taxes to balance the budget.

We know the existing political climate won't support reducing the federal government by half or eliminating Medicare. I suppose the good news is we still have a couple decades to fix the political culture. But don't expect anything from President Bush. As I said a few weeks ago, Bush is a small man promoting small ideas. He thinks government is a charity, not an agency to protect individual rights.